Insights

Working Toward Recovery in Retail: An Executive Conversation Part 2

In part 1 of Working Toward Recovery in Retail, we took a behind the scenes look at how one retailer adapted to the myriad challenges brought on by COVID, including pivoting their largest annual sales event itno an online-only experience. Part 2 takes a look at what trends are emerging due to Covid and what will look different moving into the holiday season and into 2021.

RYAN NOEL: What trends holistically or even just outside of the realm of Watson’s are you seeing?

CHRIS STRONG: This isn’t going away, the shift happened. The consumer isn’t going to regress. All of the people that I talked to believe this and are seeing the same thing. A lot of what I’m hearing is: how do we meet the expectations? How do we simplify everything? How do you make that consumer experience as clean and simple as possible? The consumer’s appetite for risk is still strong and will continue to remain strong because their tolerance for taking a chance is growing and that speaks volumes to where businesses can capitalize on that. It’s all of those digital experiences that you have to prioritize that are important for your business and which ones are going to help you establish that activity that gives you the chance to really own the consumer.

RN: John, what are you seeing?

JOHN STOCKTON: This is really an acceleration of trends that were already underway. If things get back to normal, they may level out a little bit, but I still think they’re not going to go back to where they were. We’re going to see a significant move forward toward digital touch points at every point of your customer journey, whether they are in store, or whether they’re purely online. It’s all going to be digitally enabled in the future.

You’re going to see consumer expectations get set higher in terms of the convenience factor that you can deliver with digital commerce. They’re not going to want to give that up even if they do want to come into your store as well. They still want the digital convenience that you’ve implemented and are delivering for them today.

RN: Chris, what are your predictions for the holiday season?

CS: My personal prediction is that the next few months are going to continue to see more of that shift towards commerce. Black Friday for the brick and mortar world feels like it’s going to become Cyber Monday number two. It’s going to change, it’s inevitable. John was talking about the technology’s ability to adapt to the consumer experience, we’re going to see more of that.

The augmented reality, the 3D versioning, the things that can help home retailers and businesses like us help the consumer that can’t set foot in the store. This helps them better understand the look and feel of a product that they may never be able to look and feel in the same way again.

RN: Based on that accelerated change, how are your future strategies changing and evolving as you start to look forward into 2021?

CS: Digital doesn’t just mean a website. We live by the line ‘life’s best moments start here’ and pride ourselves on delivering fun for our customers. We’re going to continue to take a look at our messaging. How we put it out there on television, how we’re influencing the message with a digital arm to it. When we’re bringing in that digital aspect of our business, we want to show customers we’re willing to meet them wherever they want to be met. All of these pieces end up influencing where we go with new technology and new pieces that might need to deliver on those enhanced experiences.

RN: From a Gorilla perspective, we’re anticipating seeing some moderate growth as something approaching normalcy returns. There’s going to be some backsliding, that’s going to be inevitable as the full range of sales channels comes online. I don’t think you’re ever going to see a return to early 2020 levels. Digital is just proven to be too resilient, too convenient, too powerful to be ignored by businesses looking to move forward and grow.

Is digital strategic to your organization? Given the current circumstances, it should be. Investments now should continue to lead to growth. If you have a pragmatic plan or a strategy in place, that is the foundation that you can execute against. We look at companies in one of three buckets. You’re either defending your market position, you’re differentiating your market position, or you’re disrupting. The reality is in retail, a lot of organizations already have some level of an established presence as opposed to what we potentially see on the B2B side where you have an organization that has never made an investment in digital and their first engagement is ‘can I just sell something online?’

For many companies, trying to figure out not only how are you going to defend that market position, but really start to differentiate yourself is going to be key. Availability has been such a critical decision maker in being able to get something. Being able to provide that value from a digital standpoint is going to be critical. This is just the start of the journey. The goal is to build some momentum to some long-term goals, setting that foundation now is critical.

CS: These times require more nimbleness than ever before. That concept of a pragmatic plan that is solution driven and can be vetted against ROI and willingness to make changes quickly and understand that if something fails, move on and learn from it. That’s something that we had to learn along the way, because not everything works. It’s easy to forget about that when building out comprehensive strategies.

RN: Commerce can’t wait. Working on the Adobe Magento platform you get the ability to stand something up relatively quickly, to get out there, to test and learn, and to be able to make adjustments on the fly. We’re in days of digital, and you can actually make real-time adjustments.

If there’s any fear or trepidation in moving forward, the worst decision is to do nothing. The best decision is to do something. It might not be perfect right away, but you can get there pretty quickly.

CS: Look for the surprises. There were products that stood out to us that we never would have predicted would have been the ones that were leading the charge in certain categories. If you’re running too fast in the wrong direction, you’ll never look for those and you’ll miss them by a mile and never come back.

Has anyone dealt with employees that were resistant or had a hard time adapting to the changes when transitioning to a more digital workspace?

RN: Change is unique in every circumstance, inevitable, and scary. The most critical thing in dealing with people that are potentially resistant is getting senior leadership involved in a project from the get-go. I have found when a senior VP is leading a charge and is able to help communicate what the specific project, engagement, or initiative is meaning holistically to the organization, that’s absolutely critical for success. Make sure you’re getting great training materials, great onboarding materials, and great transition materials. We go as far with clients as doing video walkthroughs of code at the point of implementation. If a new person rolls onto a web team or digital team within an organization, they can get up to speed very quickly.

Most of the time the initiatives that we engage in [relate to] helping to automate remedial tasks that don’t get anybody excited. These initiatives empower people to actually do what they want to do which is to better serve the customer.

CS: One of the things that I’m a big believer in is helping people get wins to help them establish confidence. I had our sales associates calling me or messaging me saying ‘you see this review I just got in our live chat about how great I’m doing with this?’ It was exciting to see that because the training documentation helped them be successful in understanding acclimation to that digital experience was key.

How are retailers and manufacturers going to provide products that can be differentiated from one another instead of the same products and just different store fronts?

CS: Experience, and how that experience is delivered is going to drive that differentiation. It’s what makes the customer feel good. Whether that experience is merely driven by a digital silo on a website or whether it’s delivered with a person that’s using digital technology to enhance the customer’s experience. The products are differentiated by that and how retailers think about what experience means to them and what it ultimately means to the customer.

RN: In today’s world, there are a lot of different places to get the same product, so why do people continue to buy from the same location? It’s not only the products, the experience, the ease of use, but it’s also all of the things that surround that.

We work with a number of organizations where things like subscription models are key to the business and then they make it easy for a customer if you have a product that necessitates that. There are add-on digital features and functions outside of just the product and additional services.

JS: Online, in some ways, commoditized the customer experience, but it commoditized it at a very poor level. It has actually commoditized in one dimension and creates an opportunity for you to differentiate and create an experience that’s more friendly, more service oriented, and easier to do than your competition. There’s tremendous opportunities to differentiate that way.

Chris, do you find yourself competing online directly with manufacturers or distributors since Covid, or has this always been the case?

CS: It’s not a daily occurrence per se, but I know it’s happening. It’s not at a scale that’s 8deterring us.

We have 50 years of heritage at a very well-known brand that gets us a seat at that table.. A customer is willing to look at us a little differently. That piece drives a lot of it and gets that foot in the digital door.

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Listen to the executive conversation in full and get an inside look into how retailers are recovering during these unprecedented times.